America is one of the most generous countries in the world. According to Grantspace.org an authority on organized philanthropy, America gave $303.75 Billion to charities in 2009. But since the decline in the economy, charities have averaged an 11% drop in donations.
The recession has forced many American’s to buckle down and spend their money more wisely. Many are hard pressed to donate when they feel they could use help themselves.
But are American’s being taken advantage of when it comes to charities?
We see charities asking for money everywhere: TV commercials, billboards, newspapers, bus stops, grocery stores, in schools and people knocking on our doors late at night.
Sure—most of us wish we could do more to help, but at who’s expense?
In a perfect world if we gave $100 to a charity, we would like to see 100% going directly to the benefactors of the charity in question. But realistically the charity has to pay for expenses, overhead, administrative costs, and fundraising. How does one find out exactly what percentage a charity spends on its programs?
According to Jon Krakauer in his short story Three Cups of Deceit, the charity Central Asia Institute (CAI) is an example of a charity that uses very little of its contributions building schools in Afghanistan—which is the mission of CAI. In 2008, its tax form showed it took in $13.1 million in contributions, but spent over $5 million on expenses. Millions of dollars poured into the CAI after the founder, Greg Mortensen published the New York Times best-selling novel Three Cups of Tea. Several people have come forward stating that many parts of Mortensen’s book are outright lies.
Krakauer donated $75,000 and President Obama gave the CAI $100,000 from the $1.4 million he received from winning the Nobel Peace Prize. After hearing from former board members that the CAI was being run like a “personal ATM machine for Greg Mortensen,” Krakauer did some digging into the charity and decided to ‘out’ the organization with his short story, and also in an interview with CBS’s 60 Minutes.
The watch-dog group American Institute of Philanthropy (www.charitywatch.org) researches charities and rates them A thru F. The higher the dollar amount spent on the charitable program, the higher the rating. Two examples of ‘A’ rated charities are the Boy Scouts of America and the Michael J. Fox Foundation for Parkinson Research.
On a side note, the Central Asia Institute received a rating of “?” from the American Institute of Philanthropy (AIP) since no one would respond to questions posed by AIP representatives.
Americans are smart, giving people. But the Bernie Madoffs of the world are just waiting to take advantage of our generosity. We need to be wiser to make sure that the money we give is money well spent.